Ways to Lower Your Cell Phone Cost

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Let’s see how much we spend on cell phones. I have a $39.99 plan along with a $15 per month data plan for my iPhone. SMB has a un-smart 🙂 phone which is $39.99 per month. With discounts, taxes, service charges, we pay $110 per month.

Some months the charges get higher. Let’s look at the common causes of higher than normal charge.

1. Data charges when SMB checks her email etc from outside of Wi-Fi area, cost is $1 for up to 1 MB of data. This is frustrating, as when you click on your email icon, even if accidentally, you are slapped with a $1 fee.

2. Cost for test messages. We do not have text plans (which costs $5 per month) rather, we pay for per-use. For At&T it’s 20 cents per text, you receive or you send. That means when you send a text message and get a reply, phone company earn 80 cents, 40 cents from each of the parties.

3. Going over free talk time. It happened only once, few years back when I was frantically taking interviews for a new job. I went over the free minutes (400 minutes in our case) and paid hefty penalty. I was still new to the country, didn’t know I could have some respite by asking her to reduce penalty.

How should you start lowering your cell phone bill?

With the above points in mind. We will see how can we reduce cell phone bills. When you add up your monthly charges, for me, it becomes $1,320 per year. It’s a huge cost for talking.

Choose right plan

The first thing that one should consider first when the cell phone bills are high is finding the right plan. if you are not using all your free minutes, consider switching to a plan with lower free minutes. For the months you run a risk of over talking, use Skype or other internet based phones when you are at home, leaving cell phone used only when you are outdoor.

Consider family plan

You can consider the family plan even if you don’t have a family, because it allows you to have additional phones, numerous minutes of talk time as well as cheaper rates. One good thing about these cheap plans is that a call to phone on same network is free. A family plan with your friends or siblings or even your parents can save you a lot of money.

Get a text plan or don’t text

If you are one of those key-board happy newer generation rep., who texts and texts, get a text plan! Else, stop texting. Don’t let some one else get richer because you love to talk. We text when it’s absolutely necessary. We never go beyond $2 a month in text charges. So, we don’t need $5 per month unlimited text plan.

Talk when its free

Calls to same carrier phones are free. Calls during late night are free, calls on week ends are free. You may not need to go over your free minutes every month if you plan your call schedule accordingly. You can even consider opting for a lower plan.

Shed the extra

Shedding the extras should result in lesser cell phone bills. Although many people do not realize that they do not use those for free, but in the real sense, they are charged for such services as call waiting, call-on-hold, caller id, call forwarding and three-way calling. There are many more, depending on your carrier.

These are hidden fees disguised as added service. Since they usually small charges, it’s hard to detect on your billing statement. When accumulated they make up a bigger cost. If you do not recognize a charge, call your provider and take appropriate steps.

Don’t pay for data pan

Honestly, where you access internet? These days free wi-fi is available at many places and the options are on the rise. Get rid of the data plan if you can. I can’t as my iPhone seems to be only medium between me and my blog when I am at work. I use the iPhone to edit comments, email ad seekers, tweet my posts. If I stop paying this $15, I would start losing few hundreds. See, if you are in the same boat as me. If you’re not, drop it.

Ring tones rings money

Downloading ringtones as well as music has great impact on the monthly fees but they are normally almost hidden. We don’t download ring tones.

Consider alternatives

Tracfone is my latest favorite and did a quick research on it. Below is an excerpt of a user review on Amazon.

Prior to purchasing the Tracfone, I was on Verizon and paying nearly $45 per month for 400 minutes. I looked back 1 year and found that the most I ever used was 50 minutes for a month. I decided to try the Tracfone. I switched my Verizon number to my new phone and have had it for over a year and I love it. Just yesterday I bought the 1 year/400 minutes card, put the 15 digit numbers in on Tracfone’s site and within seconds I got a text message saying the minutes were added to my phone. Since I have the double minutes for life, it gave me 800 minutes and 365 days to use them. All this was added to what I already had on the phone. With Verizon, if you don’t use your minutes, they’re gone. With Tracfone, unused minutes carry over to the next expiration date. You can text and use the web, just like other phones too.

We travel quite a bit and I have never lost service and it sounds as good as my Verizon phone did. So basically I have just as good phone service for $100 a year instead of $540 a year, just not as many minutes. If you figure it out, it comes out to about 67 minutes per month and 8 cents per minute.

Pay as you go, which we took advantage of. SMB had this phone until recently. We refilled $10 every month with a $45 Nokia phone as an up front cost. Now that she started going out a bit on voluntary work and especially since she’ll be taking up jobs now, a pay-as-you-go phone would cost us more money than a regular plan phone. So we took a family phone plan instead.

Make profit

This was the main reason behind taking this post up today. A colleague of mine recently made a huge profit on cell phone upgrade. She had an iPhone which was due for upgrade. She put her old cell phone on Craigslist as soon as her new phone got activated. One year old iPhone fetched her $300. Which in essence, $101 in profit, if we consider $199 new phone charge from AT&T for the upgrade.

Is it ethical practice? Can every one do this without breaking law? Haven’t seen the contract fine print, that might have some clause preventing selling the old equipment. If it’s allowed by law and contract, we can do it, right?

Our phones would be eligible for upgrades pretty soon, and we are checking AT&T account every week. I’ll have to read the fine prints now.

What other tactics you can adopt to save on your cell phone bills? I am particularly interested in knowing if you have fully eliminated cell phone from your life. Do you, by any chance, use the no-contract plans? Tell us more.

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About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

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Comments

We turned two family plans into one. My in-laws had three lines and we had two. All together we were paying about $300 between the two bills and not coming anywhere near the usage that even the minimum plan gave you. We moved everything onto one bill and now it’s around $225 a month. We split the savings between the families and it works great.

I wish our cell phone bill was that low! We spend about $200/month for one smart phone and one normal phone on a family plan. I’m on a contract and can’t wait to get out – every time I try to lower it, it bites me.

When my iPhone finally dies, I’ll probably buy an old school flip phone and get a Kindle Fire for wi-fi data access. I think I’ve milked almost all the savings I can. That reminds me. I have to call ATT for this mysterious 20 dollar charge…

I have found family plans to be the best way to lower your phone bill, if you have multiple people in your family. Also, check with your employer because they sometimes have agreements with cell phone companies. We save 19% of the main line through my husband’s company.

I have a Tracfone. $.10/minute assuming you got the double minutes for life. At my use, it costs me $100/year(I never use all my minutes). If you look at most cell phone plans, at least ones available in my area, they come out to about $.10/minute IF you use all your minutes, don’t go over and ignore the tax added. Of course, the free minutes to your family can save you a lot. Especially if you consider a tracfone would be $.10/min for you and $.10/minute for your family member if you were calling them.

If getting a Tracfone (or any phone I suppose), be sure you get one of the CDMA phones (Verizon type) rather than the GSM phones (AT&T) as there are many places I run into where the GSM phones don’t work but the CDMA phones do. Do a search to find the best phone and how to ensure you get a CDMA phone. I have the LG200C which is about as basic as you can get. I think the LG220C is just a tiny step up.

BUT…. I agree with Ginger, in many cases (certainly not all) a family plan ends up being better and is therefore worth looking into. But it is hard to get cheaper than $.10/minute.

Not sure how the Tracfone cost comes out to be $.10 per minute though..You mean to say Tracfone is not a better alternative to phone plans? That is good to know about GSM that they don’t work every where.

“Not sure how the Tracfone cost comes out to be $.10 per minute though.”

The year plan, assuming you have the double minutes on your phone is $100 for 800 minutes (400 doubled) but you can usually get bonuses to bring that up to 1,000 minutes. If you use more, there is the 450 minute card (3 months), that doubles to 900 minutes for $80 plus the large minute cards like the 1,500 card that doubles to 3,00 minutes for $200. And you can usually get bonus minutes on all these.

“You mean to say Tracfone is not a better alternative to phone plans?”

In some cases, no. If you spend LOTS of minutes on the phone with, say, your girlfriend and she is on the same plan as you and you get those minutes for free,,,,,well it could be cheaper with some plans. Lets say I traveled a lot and my GF and I had the same plan. We are limited to what’s available here, but I think it would cost us $80 for 700 minutes for two phones. Lets guess taxes etc would make that $95. If we used exactly 700 minutes for general talking, but talked to each other an additional 500 minutes, then 1,200 minutes would only cost $95….. well, that’s not such a great deal but slightly cheaper than tracfone maybe, except when you realize that if we each had a tracfone, just those 500 minutes alone would have cost us $100 since we would each be being charged minutes so now we are talking 1,700 minutes ($170). OK, so that would still not be too bad and with larger minutes you could go for cheaper tracfone cards. I still think I would go for Tracfone. But, if you have teenage kids, the family plans with the free minutes could save you a bundle. Of course, teaching your kids how to budget and save would be better. Personally, if I spent more than a couple hours a month on the phone I would shoot myself.

Now, where I live, there are limited plans out there. Some places have great plans available, although I don’t know if you can get CDMA phones or not. Some people may not care if they get a CDMA phone or not.

“That is good to know about GSM that they don’t work every where.”

Yes, I found this out the hard way and it turned out that to switch back immediately to a CDMA phone was a royal pain as far as getting my old number and minutes. Just a quirk in the system. Did finally get what I was due, but took a lot of effort. Had I waited a while, probably would not have been a problem.

I got rid of my land line years ago and only use my cell, and I love doing it this way. I also love my company, Consumer Cellular. You pay for exactly how many or how few minutes you use/need, and if you need more or less at any given month, you can bump up or knock down your plan with no penalty, even on the last day of monthly service. I pay $30 for 700 minutes and $5 for 500 texts per month. After taxes and such, it’s $42. I can’t recommend this company highly enough! They also give discounts for AARP members, the coverage is exceptional, and the customer service is top-notch. (You’d think I work for ’em…I swear I don’t! LOL!)

I ended up getting that 100 minute plan. I don’t think that’s enough for $20 bucks. Its’ really almost $26 with the texting.
My coworker told me T-moble is much better.
Anyway, I really don’t need a cell phone. My home phone is Verizon FIOS digital and its more than enought for me. It does everything except being moble. Cell phone services will have to change LOTS before I ever get another cell.

I have found going directly to customer relations a great way to negotiate a good deal for a plan. I did this and I am saving at least $50 a month. I try to use wifi as much as a I can and I make most of my calls in evenings and on weekends when they are free.

We pay $170 for two smartphones with unlimited text and data (the data is grandfathered in from old plans – they don’t allow that anymore.) I can’t believe we’re paying so much, but at the same time…never mind, I can’t believe it. My husband needs something like it for work, so for him its a necessity…me? I don’t think there’s a prepaid option for an iPhone. So I’d have to buy a new one that I don’t like as much…Anyone else remember when pagers were thought to be expensive at $20 a month?

SB,
Check Boost phone. They have unlimited plan for $60. I have iPhone for the entire family. I am paying $250 per month. This is timely post as I am looking for ways to cut down my bill. Only problem is that I’m in love with my iPhone. So, I have limited options. Apple rules. 🙂

I just upgraded to the iPhone 4s, been waiting for a long time. I paid $150 for the phone and am paying $150 per month for a family plan with 3 lines. I’m kind of locked into the plan since I have to have the data package, always looking to lower my monthly cost though.

I got really lucky in that I inherited my phone and my plan from my dad when he upgraded his phone. And he was lucky that he got his cell phone at the time of a great promotion. I have the same phone even though I could get an upgrade because it does everything I ask of it and was built back when phones did not break once a year. My phone plan is $25 for unlimited talk and text, which I know is a plan I will never give up.

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About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

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